Already Up 40% This Year, This Rental Giant Could Add 15% Before 2014

In this market, finding a stock with strong upside that also happens to have come down well off of its 52-week high isn't as easy as it may seem.

But thanks to what I call the performance protection trade , there are high-fliers that have pulled back. Stocks such as Tesla Motors (Nasdaq: TSLA ) and Facebook (Nasdaq: FB ) fit this description well, as does auto and equipment rental giant Hertz Global Holdings (NYSE: HTZ ) .

However, at the time of its 52-week high of $27.75 in mid-July, HTZ was up more than 70%. Shares sold off through the rest of the summer before retesting that high in September.

Then, in late September, HTZ suffered a huge one-day sell-off that drove it below both the 50-day and 200-day moving averages. HTZ currently trades near $22.80, about 17% off its recent highs and right about where it traded in mid-April.

The massive sell-off in HTZ came swiftly following the company's downward revision of guidance for 2013. The company said it now expects full-year revenue will be between $10.8 billion and $10.9 billion, a $50 million decrease from the guidance it offered in February. And full-year earnings were revised downward from a range of $1.78 to $1.88 a share to $1.68 to $1.78.

This came on the back of the announcement that CFO Elyse Douglas was stepping down, citing personal reasons.

Yet despite the downward revision, Hertz actually did very well on the earnings front last week when it posted better-than-expected third-quarter results. The company showed an adjusted profit of $0.73 a share, beating consensus estimates of $0.71. The company cited strong sales in its U.S.-based Hertz car rentals, its worldwide equipment rentals and its Dollar Thrifty brand rental division.

Increased revenue was primarily attributed to Dollar Thrifty. Hertz said its U.S. car rental segment rose 32.6% year over year due to its acquisition of the small competitor. In a market sector that's expected to grow substantially over the next several years, Hertz is well positioned to keep seeing strong top- and bottom-line performance.

Action to Take --> Buying shares here may represent a great value proposition for traders willing to take a chance on a rebound. If you're looking for a strong company whose shares have been beaten up a bit in this bull market, then HTZ is your stock.

-- Buy HTZ at the market price

-- Set stop-loss at $20.93, about 8% below recent prices

-- Set initial price target at $26.16 for a potential 15% gain in three months

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